THE Victorian Farmers Federation (VFF) has welcomed the move by Ararat Rural City Council to reduce the farm differential rate to one of the lowest in the state.
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However, the secretary of the Ararat Branch of the VFF Charlie De Fegely has called for urgent reform of the municipal rate collection system.
Council proposed to lower the farm differential from 60 percent of the general rate to 55 percent when it released its draft budget for 2015/16 at the start of May.
Mr De Fegely said he would be pleased to see council adopt the proposed reduction, but understood the angst from some people as the rate burden will inevitably shift to other sectors of the community.
"I welcome it, if it goes ahead then that is great," he said.
"The sad part is we are going to continue to see this level of antagonism between the urban and rural areas until a satisfactory system for rate collection is developed.
"We will continue to have these tensions between urban and rural ratepayers with both sides feeling the disadvantage."
If the draft budget is adopted and the farm differential rate drops five percent as proposed, rates in other differential categories will rise by more than seven percent.
Mr De Fegely said the current system for rate collection is out of date and he has called on the Federal Government to intervene.
"The issues with the structural set up of local government rate collection are far greater than simply the Ararat Rural City," he said.
"I can understand both sides of the argument, but I don't believe the problem can be fixed within the Ararat Rural City.
"A better system has to be developed to fund local government, other than the current system where rural rates are based on property value which sees various members of the local community paying different levels.
"Currently, funding for local government is being distributed inequitably within the community.
"Until the Federal Government moves to address these issues through the taxation review we are never going to get a satisfactory outcome."